Money and Capital Market Flashcards
1
Q
What is Money Market?
A
Borrowing and Lending money for period of less than 1 year
2
Q
What is Capital Market
A
Borrowing and Lending money for more than 1 year
3
Q
What are types of Money Market
A
Secured
Unsecured
4
Q
What is Notice money
A
Period 1 to 14 days
5
Q
What is Call Money Purpose Collateral and Documents? Based on? Interest Rate?
A
Money otherwise. Banks to meet daily cash limits No collaterals Documents like P-Notes Based on Goodwill Interest Rate market determined
6
Q
Who participate in borrowing and lending in money market
A
Indian and foreign commercial banks
Cooperative banks
DFHI
STCL
7
Q
Who only lend in money market
A
UTI
NABARD
LIC
8
Q
What are Cash Management Bills
Time
Interest Rate?
A
Meet temporary cash mismatch of govt Non standard, tradable Qualify as RFC, eligible as GSec by bank for SLR Put under Ways and Means advances in 1997 91 days Issued at discount rate Redeem at face value. Difference of 2 is interest earned
9
Q
What are Certificate of Deposits By For To Price Deposit Who cant
A
What - Secured P-notes
By - Financial Institutions and Banks
Banks for - 15 days - 3 months. FI - 1 -3 year
To - Individuals, Corporate, Trusts
Price - Discount at Face value
Deposit - Minimum 1 lakh and multiples thereof
Who cant - RRB and LABs
10
Q
What are Commercial Paper By To Term Must Multiples of
A
What - Unsecured P-notes
By - Corporate, FI, Primary dealers, Satellite dealers
To - Corporate with minimum net worth 4 lacs
Term - Short. min 7 days max 1 year
Must - CRA Ratings
Multiples of - 5 lacs
11
Q
What are Commercial Bills
When
By
To
A
Aka Bills of Exchange Seller need money - Payment date of future By - seller / drawee To - buyer / drawer Can go to banks
12
Q
What are T-Bills Issued by Time To Limit Interest Part of NDS or not
A
Money Market instruments Issued by - CG and SG Through - RBI Time - Max 1 year - 14 91 364 To - Banks FI Min - 25k Redeem - at face value Interest - no. difference b/w SP and Face value Part of - negotiable dealing system Eligible for CRR SLR
13
Q
What is DFHL Why By When What functions (3)
A
Discount and Finance House of India Limited To develop Secondary Market by RBI + PSB + LIC + GIC + UTI in 1988 2004 transfer RBI holding to SBI Biggest primary dealer. operate 2 way - lender + borrower. add stability to financial market Trade in TB, CP, CD Rediscount Commercial Bills Participate in Interbank Money
14
Q
What is LIBOR
A
IR at which Banks lend to each other
Primary Benchmark
15
Q
What is MIBOR
A
NSE
16
Q
What is MIBID
A
NSE Benchmark
17
Q
Sukhmoy Chakraborty committee
A
Money Market Reforms
18
Q
What is Capital Market instruments
A
G SEc MF FI Venture Merchant Banks
19
Q
What are Govt Securities
A
Tradeable Capital Market instruments
Issued by CG and SG
Risk free
20
Q
What are bonds Term IR Price By To
A
Aka Dated securities Long and fixed term Floating / Fixed IR Price - Face value By - Indiv, Corporate, NRI, SGs To - Indiv, NRI, FII
21
Q
CG issues
A
Bonds and T bills
22
Q
SG issues
A
Bonds only - SDL
23
Q
Other govt bonds
A
Oil Bonds
Saving Bonds
Not thru RBI
24
Q
What are capital indexed bonds
A
Bonds
IR Fixed over inflation rate - WPI / CPI
25
Can FPI invest in SDL?
Yes. RBI set the timit
26
What are SDLs?
| Principle and IR
They are dated Securities
Eligible for LAF
Principle paid - at maturity date
IR served - half yearly
27
What are development banks
Regional or international
Term lending
Refinance
Sector specific
28
What are Merchant Bank
Aka investment bank
Deal with - COmpanies, not individuals
Advice corporates on fundraising
They underwrite Public issues floated by companies
29
What are collective investment scheme
```
Many individuals
inves in asset
Share returns
SEBI regulates them
No include MFs
```
30
What Are Alternate investment fund
Pool investment for real estate
Private equity
Hedge fund
31
What are ANGELS
new category of AIFs
| Pool money from india and foreign investors
32
```
What are Real Estate Investment Trusts
Issue in
Invest in
Issue thru
Min require asset size
IPO issue size
Bought from
```
Reg by SEBI
Pool money
Issue in units in exchange
Guarantee money invest in common property - get income
Issue fund thru - IPO
Min req asset size - 500 crore for being listed
IPO issue size - 250 crore
Brought from - primary and secondary market both
33
Mutual Funds
Regulated by SEBI
| Public money
34
What are Hedge FUnds
| Regulated by
like MF
more complex less transparent
Pool money and invest
SEBI reg under AIFs
35
What are Venture Capital
Money by FIs
| Start up with potential
36
```
What are Angel investors
Wo regulate
Investor corpus
Investment time atleast
Minimum investment
COmpany time
```
```
Wealthy individuals or firms
Money in start up
In exchange of ownership / convertible debt
SEBI 2013
Reg as AIF
GEnuine - 5 lacs to 50 cr
Investor corpus - 10 crore atleast
Indians only
Not families
Investment atleast 2 years
Minimum investment 2.5 lakhs
COmpany not older than 3 years
```
37
What is Private equity
```
pRivately
Small period
Can participate in management of company
not by IPO
Company may or may not be listed
```
38
WHat are Qualified Institutional Placement
Sols as shares or fully convertible debentures or partially convertible debentures
39
What are NBFCs
```
Registed under Companies act
Loans Insurance
Not main business agri, industries
No demand Deposit
Malegam committee
```
40
What are ECBs
Access to foreign currencyby Indian Companies in PSU
Can commercial bank loans
not use for investment in Speculation
loans for - investment, new project, import capital goods
41
What are Euro Issues
indian companies raise foriegn currency using FCCB
Thru GDR to foreign investors
include EURO convertible bonds
42
What are credit default swap
kind of insurance agreement on debt default
money By investor To corporates
Risk by corporates
Insure investment in bond by 3rd party
Investor - premium to party - pay indefinitely
43
What are Infra debt funds
```
By - commercial banks, NBFC
Domestic or offshore
Thru units and Bonds
Set up trust / companies
NBFC norm registered in RBI
Only banks and infra companies can sponsor IDFs
```
44
External sources of finance
Bilateral loans
ECB masala bond
Pvt equity
stock market
45
What are types of factoring
Domestic
| Export oriented
46
Who introduced term repo and Reverse repo
Urit patel committee
| why - higher stability, better IR signaling
47
Types of MFs
Open ended Scheme - investor can buy / sell as when intend to at NAV based price
Close ended - issue units only once called NFO. thereafter on stock maret traded daily. traded at high discout to NAV.
ETF - mix of open and close. listed and traded daily on SE. Price close to NAV
48
Regulatory bodies in india
```
RBI - credit production, saving , remittances
IRDA - insurance
SEBI - investment
PFRDA - Pension
FMC - commodity based ETFutures
```
49
Quasi regulators in india
NABARD - RRBI + state and district cooperative banks
SIDBI - state finance corporations
NHB - housing finance companies
50
Regulators and ministries
Mofinance - SEBI IRDA RBI PSB DFI
MoUrban dev - NHB
MoSSI = SIDBO
FMC - regulate commodity exchange and brokres. earlier MCA transfer to Finance in 2014
51
What is FSDC
```
Financial sector development counci;
MoFinance consent
Not statutory authority
council of regulators
FM - chair
Permanent secretariat
Inter agency disputes, regulation of dinancial conlomerates, wealth mgt and formations
```
52
What is FSLRC
BN Srikrishna committee. recommendaion -
from area based to task based
develop horizontal structur e- basic reg function by unified finance agency
set up Financial Redressal agency = consumer complains
FSAT - appeals
3 other agency set up to look over banking other than RBI
